8 Tips for Beginner Real Estate Investors

There are many opportunities for wealth within real estate investing to increase cash flow, retire comfortably, and reach your financial goals.

As you dive deeper into purchasing your first property, you see more is involved with real estate investing than just buying a property and placing a tenant.

Following these eight tips can help any beginner investor set themselves up for success and avoid detrimental mistakes.

1. Consider your ability to be a landlord

Most new investors do not have a team set up, nor can they afford one, which means you will have to do any work yourself as the landlord.

You may need to complete repairs yourself or hire someone to do the work and risk cutting into your profits.

As your portfolio grows and you take on additional properties, a property manager could oversee projects like these. Once your portfolio grows, these expenses do not have the same effect on your profits as they do in the beginning.

2. Know the costs involved

Buying the property is an expense itself, but there are other costs to consider as well.

There are going to be repair costs if the house needs some work before placing a tenant. Additionally, monthly upkeep costs are required.

You can expect to cover maintenance, upgrades, yearly upkeep, utilities, taxes, insurance, etc. Before you commit, you should carefully consider whether or not you can afford these costs.

3. Be aware of legal obligations

Every state has different landlord-tenant laws, so familiarizing yourself with those laws saves you from any potential legal issues in the future.

Make sure you understand the rights of the tenant and your obligations in regards to items like security deposits, lease requirements, eviction rules, and fair housing policies

4. Protect yourself

Before buying a property, you should protect yourself legally by purchasing the property with an LLC (Limited Liability Company).

This helps manage risk since the LLC owns the property, and if anything happens to the property, you are not personally liable.

An LLC further protects your profits and retirement fund from being impacted if something happens to the property.

5. Invest in landlord insurance

Insurance, in addition to homeowner’s insurance, is needed to protect your new investment.

You can expect coverage for incidents such as property damage, lost rental income, and liability protection.

It is another expense, but when needed, insurance saves you thousands.

6. Consider location

When a property comes your way at a price you cannot pass up, you should pause to consider the property location.

Check the surrounding market value, neighborhood, and what the location offers tenants.

The spot you choose should make sense for the type of property it is. If it is a residential property, consider proximity to stores and schools in addition to crime rates. For business properties, consider the demographics, parking, and population.

7. Determine your purchasing strategy

To build the best strategy for you, consider your goals and objectives for investing. You can then sort your funds based on your intent.

If your goal is to buy as many properties as you can at once, a 20% down payment across multiple properties and using the cash flow to eliminate debt may be best suited for you.

However, if your goal at first is to have less debt, buying one property in cash would be best, and you can use the profits from that property to save for more.

8. Decide how you will pay for the property

There are many financing options for real estate, including hard money loans, mortgages, and private loans. However, these options have conditions and high interest that are not ideal.

Of course, you can buy with cash, but most beginners in real estate investing do not have hundreds of thousands of dollars to put towards a property.

Luckily, there is a way to purchase real estate without much cash on hand and no high interest rates or conditions. You can build your portfolio with business credit cards.

These cards are zero-interest for up to 18-months allowing you to buy your first property and earn a steady stream of income from the property to pay back the credit card.

It is cheaper and easier than using any other funding option, which is why many new and seasoned real estate investors choose business credit to fund their investment. 

When trying to start investing, choosing which cards offer the best zero-interest deals, cashback perks, and extend the highest credit limits can be challenging. Luckily, Fund&Grow are experts at generating up to $250,000 in zero-interest business credit for all industries, including real estate investors. We have helped over 29,000 business owners and have obtained over $1 billion in funding for our clients.

This is a great way to purchase your first property without getting yourself into thousands in debt and keep profits in your pocket.

Real estate investing is a great way to create generational wealth.

With these eight tips, you will have a growing property portfolio making you thousands in no time.

DISCLAIMER: Any advice relating to finance, investments, stocks, companies, securities, or any other financial matters whatsoever reflects the private opinion of the person giving this advice. It is not the advice of a financial, investment, or other expert. Fund&Grow, its employees, and representatives take no responsibility for any consequences resulting from following such advice. Anyone seeking professional advice is strongly advised to conduct their own research or consult a professional financial adviser. Do not disregard professional financial opinion or make any financial decisions based on what you may read in Fund&Grow's Blog. You are solely responsible for any investment or other finance-related decisions you make.